Biden Administration Scraps Student Loan Forgiveness Plan Ahead of Inauguration

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KEY TAKEAWAYS

• President Joe Biden’s administration has scrapped a proposal to provide student debt relief to borrowers who experienced pecuniary hardships.
• The Department of Education insisted the withdrawal was due to timing and the administration had the authority to administer this relief.
• The administration has been converging on tying up its loose ends before a potential President-elect Donald Trump enters the White House.

President Joe Biden’s dispensation withdrew a proposal to provide student debt relief to borrowers nearly 8 million borrowers.

The proposal, originally announced in October, last wishes a have forgiven the qualifying student loans of borrowers who had extensive medical bills, child care costs, pedigree care expenses or economic hardship caused by a natural disaster.

The Department of Education said it was withdrawing the proposal because the management wants to focus on other priorities with the remaining time before President-elect Donald Trump takes firm. These priorities included helping borrowers after the on-ramp period ended, which gave borrowers beforehand to begin repaying after the pandemic pause.

However, the department insisted it had the authority to administer student debt projection to borrowers whose hardships made it difficult to afford their payments. Whether the president’s administration can unilaterally delete student debt without congressional approval has been a point of contention in a number of legal challenges to Biden’s swotter loan relief programs.

This withdrawal was part of a larger initiative by the Biden administration to tie up its loose ends anterior to a potential government shutdown and President-elect Donald Trump’s inauguration. The administration also forgave $4.28 billion in critic loans for public service workers Friday.